Mr. Grace who plays for Institute FC is in an induced coma and being treated for swelling on the brain after the incident in Derry's Waterloo Street in the early hours of September 11.
Appearing before the court was Matthew McDermott (22) of Cornshell Fields in Derry who was charged with inflicting grievous bodily harm with intent on Mr. Grace and possessing ecstasy on September 11.
A police officer said he could connect the accused to the charges and opposed bail.
The officer told the court police were called by CCTV operators to a report of two males involved in an incident.
Mr. Grace was conscious when police arrived and had a cut to his head and was bleeding from the nose.
He was taken to Altnagelvin Hospital but his condition deteriorated and he was brought to the RVH where his condition at 8.15 this morning was said to be 'critical but stable.'
The police officer said that there was CCTV evidence and interviews with witnesses and McDermott was arrested a short distance away.
He told the court McDermott was aggressive following the incident and police believed he was 'looking for a fight.'
He opposed bail on the grounds that McDermott may re-offend and could interfere with witnesses.
He also said there were concerns for the defendant's safety as public feeling was running high.
In response to questions from defence barrister Ms Nicola Coulter the officer agreed that the two men were unknown to each other.
He also agreed that CCTV showed both men coming towards each other and appearing to throw a punch each following which both men went to the ground.
He also agreed that it appeared the injuries were caused by the fall rather than the punch.
The barrister said McDermott had co-operated with police and was 'very emotional' when he discovered the alleged injured party's condition.
She told the court that an address in the Waterside suitable to police had been found and added that McDermott had a clear record.
She told the court it was 'a devastating incident for all concenred' and that her client could not believe he had ended up where he was today.
She said he had been drinking but had been handed the drugs and there was no suggestion he was under the influence of them at the time.
She said that it appeared there had been an incident inside the bar involving the injured party and the defendant's brother who had been grabbed by the throat.
The defendant and his brother were asked to leave the bar and did so then she said 'something occurred outside.'
The barrister said it was 'a one punch incident' and that her client was unaware at the time of the seriousness of the injuries.
Deputy District Judge Peter King said that the case was in its early stages and he wanted to see how the condition of Mr. Grace went.
He said there were concerns for McDermott's safety and remanded him in custody to appear again on September 22.